WazirX Granted Four-Month Moratorium by Singapore Court

A significant development occurred recently as a Singapore court granted Indian cryptocurrency exchange WazirX a four-month moratorium. This decision comes under specific conditions aimed at ensuring transparency and accountability within the exchange’s operations. According to an industry source speaking to CoinDesk, these conditions are designed to protect the interests of users and facilitate the exchange’s recovery process.

The conditions set by the court include several critical stipulations:

• Wallet Disclosure: WazirX is required to disclose the addresses of its cryptocurrency wallets through a formal court affidavit. This step is crucial for tracking the flow of funds and ensuring that users have access to information regarding their assets.
• User Queries: The exchange must respond to all user queries in a timely manner, which is vital for maintaining trust and transparency during this tumultuous period.
• Financial Transparency: WazirX is mandated to reveal its book of accounts within six weeks. This financial disclosure will allow stakeholders to understand the exchange’s current financial status and any liabilities it may hold.
• Voting Process: Any future decisions regarding the exchange’s direction must be conducted on an independent platform, ensuring that all stakeholders have a fair opportunity to participate in the decision-making process.

WazirX had initially sought a six-month moratorium following a devastating hack that resulted in the loss of approximately $234 million, representing around 45% of its customers’ funds. This hack, which occurred in July, raised significant concerns about the security protocols in place at the exchange. The hacker responsible for this breach has nearly completed laundering the stolen funds, using tools like Tornado Cash to obscure the transaction trails.

In light of the situation, WazirX’s legal advisers have indicated that customers are unlikely to recover their funds in full, especially in cryptocurrency terms. This statement has understandably left many users anxious about the future of their investments.

During the court proceedings, the judge expressed a proactive stance on the issues at hand. She urged WazirX’s legal representatives to consider providing details about any assets the exchange holds beyond the tokens currently in its possession. This request highlights the court’s concern for comprehensive transparency, which is essential for the equitable treatment of all stakeholders involved.

The judge acknowledged WazirX’s initiative to seek a moratorium as an act of “good faith,” indicating that the exchange is willing to cooperate with the legal system to find a resolution. This move could potentially pave the way for a more structured recovery plan, should WazirX follow through on the court’s conditions.

As the situation unfolds, the cryptocurrency community will be closely watching how WazirX responds to this ruling and whether it can restore confidence among its users. The outcome of this case may set important precedents for the regulatory landscape of cryptocurrency exchanges, particularly in how they handle security breaches and user funds in the future.